The United States continues to impose new sanctions on North Korea on its nuclear program, but they do not change Kim Jong Un's behavior - and for a surprising reason: Pyongyang's skills in using cryptocurrency are increasingly crucial.
Five days ago, the United States penalized dozens of ships, shipping companies and other companies suspected of helping Pyongyang fund its nuclear and missile programs. The move is part of a broader US strategy to limit the use of North Korean regime money that it will use to improve its weapons.
The Trump Administration wants to make this punishment so severe that Pyongyang has the potential to be open to negotiations on the program. The problem is that North Korea can partially rob financial restrictions with cryptocurrencies, a form of online money, according to Priscilla Moriuchi, formerly the top National Security Agency official in charge of overseeing cyber threats from East Asia.
Moriuchi estimates that North Korea earns between $ 15 million and $ 200 million by creating and selling crypto currency and then converting it into cash. (They fluctuate depending on the value of the digital currency when North Korea spends cash.)
However, it is not enough to fully fund the North Korean weapons program. So despite the painful sanctions of the North Korean economy, there are currently some US ways that can be used to curb Pyongyang's burgeoning digital economy.
That means North Korea has a greater ability to keep its nuclear program running than we might think. "I believe that these coins are converted into something - currency or physical goods - that support North Korea's nuclear and ballistic missile programs," Moriuchi said.
With not much of the ID or security requirements of this digital currency, it makes it the perfect platform for countries such as North Korea, quite isolated from the international financial system, using new forms of trade that are so far beyond the control of state regulations .
Mining is the way how a cryptocurrency is generated. Creating a single coin requires multiple computers to solve a number of mathematical problems. And once you solve the problem, then it builds what's called a block. The block is basically the currency itself - you get a gift for creating blocks.
Anyone can create blocks, whether you're an individual or a country. It tends to be an intensive and energy-intensive computing process. You need access to a very stable and high bandwidth internet connection. Then once you build your block earn money, which is usually a gift in that currency.
So far, the majority of international and US sanctions focus on pressure points on North Korea. The sanctions have been going on for years, but the regime has not left a push to develop its ballistic missiles. North Korea, then, uses the internet to support itself, and its weapons program, while addressing these sanctions.
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